Bond yields rose on Monday in anticipation of monetary tightening later this month and higher US Treasury yields.
The yield on the most traded 6.35% bond maturing 2020 ended at 7.63%, after rising as high as 7.72% in early deals, above its previous close of 7.57%. The benchmark 10-year bond, 6.9% bond maturing 2019 yield eased to 7.67% from its previous close of 7.7% after the Reserve Bank of India chose to auction this stock on January 8.
Meanwhile, rupee soared to one-month high of 46.29/30 a dollar on exporters aggressive selling of the US currency amid its fall against other dollar amid firm equity markets.
During the day it improved further to touch a high of 46.26, the level last seen on December 4, 2009, before closing the day at 46.29/30 a dollar.
According to forex dealers there was dollar selling by exporters on expectations of fall in the US unit in the coming days as the American currency was down against its major rivals in overseas markets.
Foreign banks were said to be buyers to arbitrage in the offshore Non Deliverable Forwards (NDF) market.
Yields had opened higher tracking US Treasury yields that rose in Europe on the first trading day of the New Year on expectations of a faster economic recovery.
The slew of central and state government auctions this week also kept mood cautious.
